THE NAVIGATOR COMPANY 1
Highlights 2016 (vs. 2015)
Group achieves record level of paper sales totalling 1,587 thousand tons in 2016
Strong operational performance offsets lower prices, with 2% growth in volume of paper sales, 15% in pulp sales and 30% in tissue paper
Turnover of € 1.577 billion (€ 1.628 billion), brought down by lower power sales as a result of expected change in tariffs
- Cost reduction programme boosts EBITDA by € 16 million
EBITDA up 2% to € 397.4 million (€ 390 million), and EBITDA/Sales margin improves to 25.2% (24.0%)
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Free cash flow generation soars to € 183.8 million (€ 81.0 million), up by €
102.8 million
Debt restructuring leads to significant improvement in financial results (€ 20.8 million vs. € 50.3 million)
Colombo Energy in US completes and starts up pellets mill with annual production capacity of 500 thousand tons.
- Navigator and Soporset elected best Brands in Europe in 2016 (by Opticom and EMGE) Highlights 4th Quarter 2016 (vs. Q3 2016 )
Record sales volume for pulp and paper in quarter secures sales of € 422 million (€ 377 million), softening the impact of lower pulp and paper prices.
Q3 EBITDA of € 96 million (€ 106 million), reflecting the drop in pulp and paper prices
Dynamic generation of free cash flow, totalling € 82.7 million in quarter (€ 69.7 million)
Groups cuts net debt and improves Net Debt / Ebitda ratio to 1.6 (1.8)
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Summary of Leading Indicators - IFRS (unaudited figures)in million euros | FY 2016 | FY 2015 | % Change (5) 2016/ 2015 |
Total sales | 1 577.4 | 1 628.0 | -3.1% |
EBITDA (1) | 397.4 | 390.0 | 1.9% |
Operating profits | 230.4 | 282.9 | - 18.6% |
Financial results | - 20.8 | - 50.3 | - 58.6% |
Net earnings | 217.5 | 196.4 | 10.7% |
Cash flow | 384.6 | 303.6 | 81.0 |
Free Cash Flow (2) | 183.8 | 81.0 | 102.8 |
Capex (6) | 138.6 | 148.5 | - 9.9 |
Net debt (3) | 640.7 | 654.5 | - 13.8 |
EBITDA / Sales (%) | 25.2% | 24.0% | 1.2 pp |
ROS | 13.8% | 12.1% | 1.7 pp |
ROE | 17.8% | 14.8% | 3.0 pp |
ROCE | 12.3% | 15.7% | - 3.4 pp |
Equity ratio | 51.2% | 50.0% | 1.2 pp |
Net Debt / EBITDA (4 ) | 1.6 | 1.7 | 1.0 |
in million euros | Q4 2016 | Q3 2016 | % Change (5) Q4 16/Q3 16 |
Total sales | 422.0 | 376.8 | 12.0% |
EBITDA (1) | 95.9 | 106.2 | -9.7% |
Operating profits | 52.3 | 70.1 | - 25.4% |
Financial results | - 4.2 | - 3.2 | 32.2% |
Net earnings | 83.2 | 48.8 | 70.4% |
Cash flow | 126.8 | 84.9 | 41.9 |
Free Cash Flow (2) | 82.7 | 69.7 | 13.0 |
Capex | 38.0 | 25.3 | 12.7 |
Net debt (3) | 640.7 | 723.4 | - 82.7 |
EBITDA / Sales (%) | 22.7% | 28.2% | -5.5 pp |
ROS | 19.7% | 13.0% | 6.8 pp |
ROE | 27.8% | 17.1% | 10.7 pp |
ROCE | 11.1% | 14.8% | - 3.7 pp |
Equity ratio | 51.2% | 50.0% | 1.2 pp |
Net Debt / EBITDA (4 ) | 1.6 | 1.8 | 0.9 |
Operating profits + depreciation + provisions
Var. Net debt + dividends + purchase of own shares
Interest-bearing net debt - liquid assets
EBITDA corresponding to last 12 months
Variation in figures not rounded up/down
2015 investment figures include € 41 million for purchase of AMS
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1. ANALYSIS OF RESULTS 2016 vs. 2015The Navigator Company recorded turnover of € 1,577.4 million in 2016, as compared to
€ 1,628 million in 2015. This reduction was due primarily to a drop in the value of energy sales, after the review of the tariff for sales to the national grid by the natural gas co- generation plant in Figueira da Foz, and also to the global contraction in pulp and paper price observed over the course of 2016. The Group mitigated the downward trend in prices by increasing its sales volumes, and also through an effort to reduce costs.
In Europe, conditions in the UWF market deteriorated during 2016, and estimates point to a reduction in apparent consumption of 3.8% (-0.3% in 2015) and growth in total imports of more than 18%. Paper imports from Asia increased significantly, in particular in office paper, triggering an overall downwards adjustment in prices. In this difficult environment, Navigator achieved UWF sales of 1,586.8 thousand tons, up by 2.0% in relation to 2015, setting a new record in terms of volume. The Group succeeded in placing additional volumes of paper in this context by increasing its sales both in Europe and in International markets. In European sales, the average price was 1.2% lower than recorded in the previous year, which compares with an increase in the A4 price index for Europe (PIX Copy-B) of 0.3%; this was due to a negative change in the group product and geography sales mix. Navigator's average sales price for all markets was down by 2.4% in relation to the previous year, also due to the change in product and geography sales mix.
Falling pulp prices were a key feature of the business environment, in a descent which started in late 2015 and continued throughout 2016. The benchmark index for hardwood pulp (PIX - BHKP) dropped by around 16% in USD and 13% in Euros in relation to the start of 2016. Navigator nonetheless recorded strong operating performance: the volume of pulp placed on the market stood at 290.6 thousand tons, pushing up sales by around 15.1%, thanks to the capacity expansion at the Cacia mill in 2015, which has resulted in increased availability of pulp for the market. The increase in
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